What are the Tax Benefits in the Dominican Republic?

The Dominican Republic is one of the most interesting and attractive countries in Central America because it offers many benefits and incentives for companies that take part in some of the main industries of the country. The Dominican Republic is known around the world as a tropical destination, which means tourism is one of the main sources of income, so the government highly promotes foreign inversion and businesses to support this industry.

Other main industries involve infrastructure, manufacturing, the development of renewable energy, and agriculture.

Below you can find some of the incentives, exemptions, and regulations the government of the Dominican Republic promotes to help the development of the country.

EASYCO - TAX BENEFITS DOMINICAN REPUBLIC

Territorial Tax System

The Dominican Republic follows a Territorial Tax System, which means that it only collects income from Dominican Republic sources, and all income that comes from abroad is exempt from taxes, even if it’s received by individuals or companies that are based in the Dominican Republic.

Tax Incentives

The Dominican Republic has a history of economic growth and stable politics, focused on the industrialization of the country, development, and promotion of foreign investment. This is why the government gives Tax Incentives and Exemptions to businesses that follow certain guidelines. These are some of the incentives that the government promotes to support foreign inversion and the development of the country:

Border Development Incentives

The Dominican Republic is located on two-thirds of an island called ‘La Española’ and the other third of the island is Haiti. Since 2001, the Dominican Republic is promoting the development of the frontier zone with agriculture, tourism, and energy companies in order to generate job positions for people in the area.

Tourism Incentives

The Dominican Republic is an island with amazing touristic attractions that receive visitors from all over the world. Some of the areas and industries of the country are more developed than others, which is why the government offers incentives and tax exemptions to businesses looking into these new opportunities, or interested in further developing already existing ones.

Some of these incentives and exemptions according to the 58-01 Incentive Law are:

Exemption on Income Tax for 10 years
Exemption of all national and municipal taxes for 15 years
Exemption from custom taxes and transfer of import of equipment, industrial goods, and services.
Exemption of tax on luxury housing

Alternative Energy Incentives

Due to the lack of infrastructure and cost of traditional energy resources in the Dominican Republic, the government works closely with companies that are interested in developing Alternative Energy Resources in the country. Some renewable energy resources are solar power, bio-fuel, bio-diesel, wind, and ethanol, among others.

Free Trade Zones (FTZ) in the Dominican Republic

Free Trade Zones (FTZ) or Special Economic Zones (SEZ) are one of the main ones responsible for the development of the Dominican Republic in the last 40 years. According to the World Bank, “SZEs are geographically bounded areas in which customs, tax, and investment regulations are more liberal than in the rest of the country”.

As of 2016, FTZs were responsible for around 140,000 direct jobs, for both men are women, and in a big variety of types of jobs from low-skilled, to higher, more educated-skill workers.

Some of the main activities taking place in FTZ are:

Services
Medical Instruments
Textiles
Tobacco
Agroindustry

Register a Company in the Dominican Republic!

These are the steps you need to follow to register a company in the Dominican Republic. If you want to learn more about the company incorporation process, you can read our article here!

Choose the right type of company: This depends on how many shareholders are going to participate, as well as the initial capital. The most common types of companies in the Dominican Republic are:
- Corporation or ‘Sociedad Anónima’ (SA)
- Foreign Branch Office
- Limited Liability Company or ‘Sociedad de Responsabilidad Limitada’ (SRL)
Appoint a Legal Representative and sign the Power of Attorney
Check for the company’s name availability at the Mercantile Registry
Draft the company’s bylaws
Pay the incorporation fees
Submit the documentation to the Chamber of Commerce
Submit the registration documents to the National Taxpayers Registry
Open a Corporate Bank Account

Get Assistance from Easyco Experts!

The Dominican Republic is a very attractive country for business and investment purposes and attracts people from all over the world. At Easyco, we can help you register your company in the Dominican Republic and enjoy all the benefits!

Easyco also provides additional services to guarantee your company’s compliance, which includes: